Oklahoma Teachers’ Retirement System Plans $440 Million Infrastructure Investment
The Oklahoma Teachers’ Retirement System (OTRS) is set to invest $440 million (€386.7 million) in infrastructure in 2025, marking a significant milestone as it establishes its inaugural infrastructure pacing plan. This venture aligns with the pension fund’s recent decision to allocate 3% of its portfolio to infrastructure for the first time.
During a recent board meeting, OTRS officials outlined plans to make initial infrastructure commitments in the second half of this year, aiming to invest in up to two open-ended funds. Investment consultant AON Investment USA highlighted that these open-ended funds typically deliver more immediate long-term benefits compared to close-ended alternatives. According to AON, mid-market core-plus and value-add funds present the best value proposition for infrastructure investments, indicating a strategic approach to asset allocation.
In addition to the infrastructure pacing plan, OTRS has also committed $100 million to the Ares Industrial Real Estate Fund, which focuses on core open-ended U.S. industrial properties. Ares has not commented on the pension fund’s commitment; however, the latest reports indicate that approximately $2.9 billion of equity commitments have been called for the Ares fund, with around $60 million in uncalled capital remaining as of the end of 2024.
This proactive investment strategy reflects OTRS’s commitment to enhancing returns and diversifying its portfolio through infrastructure, a sector that is increasingly viewed as vital for long-term financial stability. As this plan unfolds, OTRS aims to strategically position itself within the evolving landscape of infrastructure finance.
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